U.S. Wind Power Faces Crisis as Trump Tightens Development Rules
- Ørsted’s market value fell by nearly a third as Trump’s policies undermined U.S. wind project viability and financing.
- Trump’s administration has rolled back Biden-era renewable incentives, tightened permitting, halted projects, and withdrawn federal waters from leasing.
- Major wind companies, including Ørsted and Equinor, are reassessing U.S. investments amid heightened political and financial uncertainty.
The Danish wind energy producer Ørsted has blamed United States President Donald Trump for its plummeting shares following Trump’s months of attack on wind energy, and it is not the only wind energy producer suffering from the new U.S. policies that make it more difficult to develop wind farms.
For months, President Trump has threatened those in the wind and solar energy industries, as he stated plans to restrict new development. In July, Trump announced plans to tighten federal permitting to restrict solar and wind energy development, following the passing of his One Big Beautiful Bill Act, which, instead, focuses on the expansion of fossil fuel and nuclear power projects. His recent policy moves have led several wind energy companies to rethink investments in the U.S. and halt developments due to financial and political uncertainty.
In August, Europe’s largest wind power company, Ørsted, blamed President Trump for derailing its business model after its market value dropped by nearly a third. Ørsted told shareholders that it would need to raise funds to cover the cost of its plans due to the “extraordinary situation” the company was facing in the U.S. Ørsted said that the “recent material developments in the U.S.” had made it impossible to raise the money needed by selling a stake in its new the eastern seaboard project off as previously planned.
Typically, Ørsted covers the cost of its new developments by selling a stake in each project once it is under development. However, following Trump’s attack on U.S. wind energy, the value of domestic wind projects has dropped significantly.
Trump’s approach to wind and solar power marks a U-turn on the Biden-era stance on renewables. The Biden administration introduced a wide range of policies and orders to promote the expansion of the U.S. renewable energy industry, supported by financial incentives, such as tax breaks. This was aimed at supporting a green transition away from fossil fuels. Now, Trump is attempting to undo much of the groundwork laid by Biden, to stall green energy progress and push fossil fuel production even higher.
In January, Trump ordered a review of offshore wind permitting and leasing. The review hit the industry hard at a time when it was only just recovering from supply chain disruptions caused by the Covid-19 pandemic and higher material costs, which have driven up project costs. Trump has since issued a stop-work order on a project being developed by the Norwegian energy company Equinor, which has made those in the industry wary of investing in new developments.
Nevertheless, Ørsted plans to complete its Sunrise Wind project off the coast of New York and the Revolution Wind project off Rhode Island, so long as it can raise the $9 billion needed to achieve this. The firm’s CEO, Rasmus Errboe, said, “Ørsted and our industry are in an extraordinary situation with the adverse market development in the U.S. on top of the past years’ macroeconomic and supply chain challenges.”
In August, the Interior Department said that approving new solar and solar projects would require additional new layers of political review by the Interior Secretary’s office, which is leading to permitting delays. The agency is also investigating the prevalence of bird deaths related to wind farms and withdrawing millions of acres of federal waters that were previously available for leasing for offshore wind.
It is also expected to begin reviewing wind projects that have already been granted approval but are being sued by opponents, and may rescind their permits, even if they are already under construction. In August, the agency said it was reversing the Biden-era approval of the Lava Ridge Wind Project in southern Idaho as, among other issues, lawmakers said it was visible from a World War II internment camp for Japanese Americans, known as the Minidoka National Historic Site.
While the political moves to restrict wind energy development are new, Trump’s disdain for the energy source is not. The U.S. president first publicly voiced his opposition to wind energy 14 years ago when he fought against the development of 11 wind turbines that were visible from his Aberdeenshire golf course in Scotland. At the time, Trump argued the “ugly” turbines were “monstrosities” that would help sink Scotland’s tourism industry.
He ultimately lost the legal fight aimed at halting construction of the turbines, but now he appears to be back with a vengeance. On a recent visit to the U.K., Trump spoke out against the country’s energy agenda, which focuses on a shift away from fossil fuels to renewable alternatives. During the visit, Trump stated, “They should get rid of the windmills and bring back the oil… The windmills are really detrimental to the beauty of Scotland and every other place they go up.”
The United States appeared to be a favourable investment environment for renewable energy companies looking to develop their portfolios under the Biden administration, which encouraged companies such as Ørsted and Equinor to plan major onshore and offshore wind power developments in the U.S. However, Trump’s recent attack on wind energy has made the investment outlook much more uncertain, leading companies to lose both public confidence and funds as they struggle to develop new projects.
By Felicity Bradstock for Oilprice.com
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